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The European Parliament decided to grant discharge to the Director of the European Joint Undertaking for ITER and the Development of Fusion Energy on the implementation of the budget of the Joint Undertaking for the financial year 2016 and to approve the closure of the accounts of the Joint Undertaking for the same financial year. Noting that the Court of Auditors considered that the annual accounts of the Joint Undertaking for the financial year 2016 accurately reflected the financial position of the Joint Undertaking as at 31 December 2016, as well as the results of its operations, Parliament adopted by 494 votes in favor, 193 against and 10 abstentions, a resolution containing a series of observations which form an integral part of the discharge decision General: Members noted that in November 2016, the Council of ITER Organisation (the ITER Council) approved a new ITER project baseline for the scope, schedule and the costs of the project. They noted, moreover, that the overall project schedule for operations ´First Plasma ´ and ´Deuterium-Tritium´ was approved. Following the approval of the new ITER project baseline, the Joint Undertaking set the new timetable and recalculated the related cost at completion of the Joint Undertakings contribution to the project construction phase. Parliament expressed ongoing concern that the estimated completion date for the whole construction phase is currently planned with a delay of about 15 years compared to the original baseline. The new schedule endorsed by the ITER Council set out a four-stage approach, making December 2025 the deadline for achieving the first strategic milestone of the project construction phase (First Plasma) and December 2035 the estimated completion date for the whole construction phase. Members noted the Courts report finding that the results, which were presented to the Joint Undertakings Governing Board in December 2016, indicated an expected additional funding requirement to that already committed of EUR 5.4 billion for the construction phase after 2020, which represents an increase of 82 % in relation to the approved EUR 6.6 billion budget. Additional funding required to complete the ITER project must involve future Multiannual Financial Framework commitments. Parliament stressed that on 29 March 2017, the United Kingdom notified the European Council of its decision to withdraw from the EU and Euratom. An agreement setting out the arrangements for its withdrawal is being negotiated. However, the United Kingdom has expressed its interest in further participating in EU fusion energy activities. The resolution stressed that the United Kingdom has expressed its interest in further participating in EU fusion energy activities. Fusion communities have expressed their hope that the JET (Joint European Torus) experiment at Culham in the United Kingdom continue beyond 2018. Budget and financial management: the final 2016 budget available for implementation included commitment appropriations of EUR 488 000 000 and payment appropriations of EUR 724 510 000. The utilisation rates for commitment and payment appropriations were 99.8 % and 98 % respectively. The full implementation of the 2016 budget made the level of cancelled appropriations very low for 2016. Out of EUR 488 000 000 available for commitment appropriations, almost 100 % was implemented through direct individual commitments. Other observations: the resolution also contained a series of observations on the prevention and management of conflicts of interests, personal selection and recruitment, internal control measures, operational procurements and grants. It noted in particular: that the governing board adopted an anti-fraud strategy and corresponding action plan, of which most of the actions were implemented in 2016; however, that the Joint Undertaking has not set up a specific tool to facilitate the monitoring of its actions in relation to procurement procedures, in particular those related to risk assessment and the evaluation; further to the adoption of the Joint Undertakings whistleblowing rules in 2015, an implementation process was drafted on how serious irregularities and wrongdoings can be reported and are being followed-up; the Joint Undertaking did not provide detailed information on the selection and recruitment of staff in 2016; 40 operational procurement procedures were launched and 52 procurement contracts were signed; concern about the worrying increase in the timeframe to contract for procurements for both amounts above and below the EUR 1 000 000 threshold.

The Committee on Budgetary Control adopted the report by Brian HAYES (EPP, IE) on discharge in respect of the implementation of the budget of the ITER and the Development of Fusion Energy for the financial year 2016. The committee called on the European Parliament to grant the Director of the European Joint Undertaking for ITER and the Development of Fusion Energy discharge in respect of the implementation of the Joint Undertakings budget for the financial year 2016. Noting that the Court of Auditors issued a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions for the financial year 2016, Members called on Parliament to approve the closure of the joint undertakings accounts. They made, however, a number of recommendations that need to be taken into account when the discharge is granted. They may be summarised as follows: General: Members noted that in November 2016, the Council of ITER Organisation (the ITER Council) approved a new ITER project baseline for the scope, schedule and the costs of the project. They noted, moreover, that the overall project schedule for operations ´First Plasma ´ and ´Deuterium-Tritium´ was approved. Following the approval of the new ITER project baseline, the Joint Undertaking set the new timetable and recalculated the related cost at completion of the Joint Undertakings contribution to the project construction phase. Members expressed ongoing concern that the estimated completion date for the whole construction phase is currently planned with a delay of about 15 years compared to the original baseline. The new schedule endorsed by the ITER Council set out a four-stage approach, making December 2025 the deadline for achieving the first strategic milestone of the project construction phase (First Plasma) and December 2035 the estimated completion date for the whole construction phase. Members noted the Courts report finding that the results, which were presented to the Joint Undertakings Governing Board in December 2016, indicated an expected additional funding requirement to that already committed of EUR 5.4 billion for the construction phase after 2020, which represents an increase of 82 % in relation to the approved EUR 6.6 billion budget. Additional funding required to complete the ITER project must involve future Multiannual Financial Framework commitments. The report stressed that on 29 March 2017, the United Kingdom notified the European Council of its decision to withdraw from the EU and Euratom. An agreement setting out the arrangements for its withdrawal is being negotiated. However, the United Kingdom has expressed its interest in further participating in EU fusion energy activities. Budget and financial management: the final 2016 budget available for implementation included commitment appropriations of EUR 488 000 000 and payment appropriations of EUR 724 510 000. The utilisation rates for commitment and payment appropriations were 99.8 % and 98 % respectively. The full implementation of the 2016 budget made the level of cancelled appropriations very low for 2016. Out of EUR 488 000 000 available for commitment appropriations, almost 100 % was implemented through direct individual commitments. Other observations: the report also contained a series of observations on the prevention and management of conflicts of interests, personal selection and recruitment, internal control measures, operational procurements and grants. The report also noted in particular: that the governing board adopted an anti-fraud strategy and corresponding action plan, of which most of the actions were implemented in 2016; 40 operational procurement procedures were launched and 52 procurement contracts were signed; concern about the worrying increase in the timeframe to contract for procurements for both amounts above and below the EUR 1 000 000 threshold.

PURPOSE: presentation by the Commission of the consolidated annual accounts of the European Union for the financial year 2016, as part of the 2016 discharge procedure. Analysis of the accounts of the European Joint Undertaking Fusion for ITER and the Development of Fusion Energy - Fusion for Energy Joint Undertaking (F4E) CONTENT: the organisational governance of the EU consists of institutions, agencies and other EU bodies whose expenditure is included in the general budget of the Union. This Commission document concerns the EU's consolidated accounts for the year 2016 and details how spending by the EU institutions and bodies was carried out. The consolidated annual accounts of the EU provide financial information on the activities of the institutions, agencies and other bodies of the EU from an accrual accounting and budgetary perspective. It is the responsibility of the Commission's Accounting Officer to prepare the EU's consolidated annual accounts and ensure that they present fairly, in all material aspects, the financial position, the result of the operations and the cash flows of the EU institutions and bodies, including the ITER-F4E Joint Undertaking, with a view to granting discharge. Discharge procedure: the final step of a budget lifecycle is the discharge of the budget for a given financial year. It represents the political aspect of the external control of budget implementation and is the decision by which the European Parliament, acting on a Council recommendation, "releases" the Commission (and other EU bodies) from its responsibility for management of a given budget by marking the end of that budget's existence. The European Parliament is the discharge authority within the EU. The discharge procedure may produce three outcomes: (i) the granting; (ii) postponement or; (iii) the refusal of the discharge. The final discharge report including specific recommendations to the Commission for action is adopted in plenary by the European Parliament and are subject to an annual follow up report in which the Commission outlines the concrete actions it has taken to implement the recommendations made. Each agency is subject to its own discharge procedure, including ITER and Fusion for Energy. ITER and Fusion for Energy Joint Undertaking (F4E): Fusion for Energy (F4E) is a Joint Undertaking created under the Euratom Treaty by Council Decision 2007/198/Euratom. F4E was established for a period of 35 years from 19 April 2007 and its seat is located in Barcelona, Spain. ITER was created to manage and to encourage the exploitation of the ITER facilities, to promote public understanding and acceptance of fusion energy, and to undertake any other activities that are necessary to achieve its purpose. ITER involves the EU, China, India, Russia, South Korea, Japan and the USA. Main changes in 2016: during the period covered by this report there have been some important changes at the ITER Organization and F4E: a new Director, Johannes Schwemmer, took up his duties on 1 January 2016; the F4E Director took over the Action Plan prepared and used by the Acting Director to implement the necessary actions in F4E. He closely collaborated with the ITER Organization Director General to carry out further improvements to the project; he also modified the existing F4E structure and a new Organization Breakdown Structure was effective as of 1 October 2016; the close collaboration with the ITER Organization led to the approval of the updated overall project schedule (in November 2016 at the ITER Council-19). As for the overall ITER project cost and the associated estimate of resources for the overall period 2016-2035, it was approved ad referendum (i.e. subject to domestic processes of obtaining approval including approval of budgetary authorities and/or parliament if required). A staged approach is now foreseen for the project with first plasma in December 2025. These decisions were in line with the conclusions from the independent review of the Updated ITER Long Term Schedule and with the conclusions of the work carried out by F4E as explained below. As regards the accounts: Commitment appropriations: available: EUR 764 million; made: EUR 763 million. Payment appropriations: available: EUR 730 million; paid: EUR 716 million. Please also refer to the final accounts of ITER-F4E.

The European Parliament decided to grant
discharge to the Director of the European Joint Undertaking for
ITER and the Development of Fusion Energy on the implementation of
the budget of the Joint Undertaking for the financial year 2016 and
to approve the closure of the accounts of the Joint Undertaking for
the same financial year.

Noting that the Court of Auditors considered
that the annual accounts of the Joint Undertaking for the financial
year 2016 accurately reflected the financial position of the Joint
Undertaking as at 31 December 2016, as well as the results of its
operations, Parliament adopted by 494 votes in favor, 193 against
and 10 abstentions, a resolution containing a series of
observations which form an integral part of the discharge
decision

General: Members noted that in November
2016, the Council of ITER Organisation (the ITER
Council) approved a new ITER project baseline for the
scope, schedule and the costs of the project. They noted, moreover,
that the overall project schedule for operations ´First Plasma
´ and ´Deuterium-Tritium´ was approved. Following
the approval of the new ITER project baseline, the Joint
Undertaking set the new timetable and recalculated the
related cost at completion of the Joint Undertakings
contribution to the project construction phase.

Parliament expressed ongoing concern that the
estimated completion date for the whole construction phase is
currently planned with a delay of about 15 years
compared to the original baseline. The new schedule endorsed by the
ITER Council set out a four-stage approach, making December
2025 the deadline for achieving the first strategic
milestone of the project construction phase (First
Plasma) and December 2035 the estimated completion
date for the whole construction phase.

Members noted the Courts report finding
that the results, which were presented to the Joint
Undertakings Governing Board in December 2016, indicated an
expected additional funding requirement to that already committed
of EUR 5.4 billion for the construction phase after 2020, which
represents an increase of 82 % in relation to the approved EUR 6.6
billion budget. Additional funding required to complete the ITER
project must involve future Multiannual Financial Framework
commitments.

Parliament stressed that on 29 March 2017, the
United Kingdom notified the European Council of its decision to
withdraw from the EU and Euratom. An agreement setting out the
arrangements for its withdrawal is being negotiated. However, the
United Kingdom has expressed its interest in further participating
in EU fusion energy activities.

The resolution stressed that the United
Kingdom has expressed its interest in further participating in
EU fusion energy activities. Fusion communities have expressed
their hope that the JET (Joint European Torus) experiment at
Culham in the United Kingdom continue beyond 2018.

Budget and financial
management: the
final 2016 budget available for implementation included commitment
appropriations of EUR 488 000 000 and payment appropriations of EUR
724 510 000. The utilisation rates for commitment and payment
appropriations were 99.8 % and 98
% respectively. The full implementation of the 2016
budget made the level of cancelled appropriations very low for
2016. Out of EUR 488 000 000 available for commitment
appropriations, almost 100 % was implemented through direct
individual commitments.

Other observations:the resolution also
contained a series of observations on the prevention and management
of conflicts of interests, personal selection and recruitment,
internal control measures, operational procurements and
grants.

It noted in particular:

that the governing board adopted an anti-fraud
strategy and corresponding action plan, of which most of the
actions were implemented in 2016; however, that the Joint
Undertaking has not set up a specific tool to facilitate the
monitoring of its actions in relation to procurement procedures, in
particular those related to risk assessment and the
evaluation;

further to the adoption of the Joint
Undertakings whistleblowing rules in 2015, an implementation
process was drafted on how serious irregularities and wrongdoings
can be reported and are being followed-up;

the Joint Undertaking did not provide detailed
information on the selection and recruitment of staff in
2016;

The Committee on Budgetary Control adopted the
report by Brian HAYES (EPP, IE) on discharge in respect of the
implementation of the budget of the ITER and the Development of
Fusion Energy for the financial year 2016.

The committee called on the European Parliament
to grant the Director of the European Joint Undertaking for ITER
and the Development of Fusion Energy discharge in respect of the
implementation of the Joint Undertakings budget for the
financial year 2016.

Noting that the Court of Auditors issued a
statement of assurance as to the reliability of the accounts and
the legality and regularity of the underlying transactions for the
financial year 2016, Members called on Parliament to approve the
closure of the joint undertakings accounts.

They made, however, a number of recommendations
that need to be taken into account when the discharge is granted.
They may be summarised as follows:

General: Members noted that in November
2016, the Council of ITER Organisation (the ITER
Council) approved a new ITER project baseline for the scope,
schedule and the costs of the project. They noted, moreover, that
the overall project schedule for operations ´First Plasma
´ and ´Deuterium-Tritium´ was approved. Following
the approval of the new ITER project baseline, the Joint
Undertaking set the new timetable and recalculated the related cost
at completion of the Joint Undertakings contribution to the
project construction phase.

Members expressed ongoing concern that the
estimated completion date for the whole construction phase is
currently planned with a delay of about 15 years compared to
the original baseline. The new schedule endorsed by the ITER
Council set out a four-stage approach, making December 2025 the
deadline for achieving the first strategic milestone of the
project construction phase (First Plasma) and December
2035 the estimated completion date for the whole construction
phase.

Members noted the Courts report finding
that the results, which were presented to the Joint
Undertakings Governing Board in December 2016, indicated an
expected additional funding requirement to that already committed
of EUR 5.4 billion for the construction phase after 2020, which
represents an increase of 82 % in relation to the approved EUR 6.6
billion budget. Additional funding required to complete the ITER
project must involve future Multiannual Financial Framework
commitments.

The report stressed that on 29 March 2017, the
United Kingdom notified the European Council of its decision to
withdraw from the EU and Euratom. An agreement setting out the
arrangements for its withdrawal is being negotiated. However, the
United Kingdom has expressed its interest in further participating
in EU fusion energy activities.

Budget and financial
management: the
final 2016 budget available for implementation included commitment
appropriations of EUR 488 000 000 and payment appropriations of EUR
724 510 000. The utilisation rates for commitment and payment
appropriations were 99.8 % and 98 % respectively.The full
implementation of the 2016 budget made the level of cancelled
appropriations very low for 2016. Out of EUR 488 000 000 available
for commitment appropriations, almost 100 % was implemented through
direct individual commitments.

Other observations: the report also contained a
series of observations on the prevention and management of
conflicts of interests, personal selection and recruitment,
internal control measures, operational procurements and
grants.

The report also noted in particular:

that the governing board adopted an anti-fraud
strategy and corresponding action plan, of which most of the
actions were implemented in 2016;

PURPOSE: presentation by the Commission of the
consolidated annual accounts of the European Union for the
financial year 2016, as part of the 2016 discharge
procedure.

Analysis of the accounts of the European Joint
Undertaking Fusion for ITER and the Development of Fusion Energy -
Fusion for Energy Joint Undertaking (F4E)

CONTENT: the organisational governance of the EU
consists of institutions, agencies and other EU bodies whose
expenditure is included in the general budget of the
Union.

This Commission document concerns the EU's
consolidated accounts for the year 2016 and details how spending by
the EU institutions and bodies was carried out. The consolidated
annual accounts of the EU provide financial information on the
activities of the institutions, agencies and other bodies of the EU
from an accrual accounting and budgetary perspective.

It is the responsibility of the Commission's
Accounting Officer to prepare the EU's consolidated annual accounts
and ensure that they present fairly, in all material aspects, the
financial position, the result of the operations and the cash flows
of the EU institutions and bodies, including the ITER-F4E Joint
Undertaking, with a view to granting discharge.

Discharge procedure: the
final step of a budget lifecycle is the discharge of the budget for
a given financial year. It represents the political aspect of the
external control of budget implementation and is the decision by
which the European Parliament, acting on a Council recommendation,
"releases" the Commission (and other EU bodies) from its
responsibility for management of a given budget by marking the end
of that budget's existence. The European Parliament is the
discharge authority within the EU.

The discharge procedure may produce three outcomes:
(i) the granting; (ii) postponement or; (iii) the refusal of the
discharge.

The final discharge report including specific
recommendations to the Commission for action is adopted in plenary
by the European Parliament and are subject to an annual follow up
report in which the Commission outlines the concrete actions it has
taken to implement the recommendations made.

Each agency is subject to its own discharge procedure,
including ITER and Fusion for Energy.

ITER and Fusion for Energy Joint Undertaking
(F4E): Fusion for Energy (F4E) is a
Joint Undertaking created under the Euratom Treaty by Council
Decision 2007/198/Euratom. F4E was established for a period of
35 years from 19 April 2007 and its seat is located in Barcelona,
Spain. ITER was created to manage and to encourage the exploitation
of the ITER facilities, to promote public understanding and
acceptance of fusion energy, and to undertake any other activities
that are necessary to achieve its purpose. ITER involves the EU,
China, India, Russia, South Korea, Japan and the USA.

Main changes in 2016:
during the period covered by this report there have been some
important changes at the ITER Organization and F4E:

a new Director, Johannes Schwemmer, took up his duties
on 1 January 2016;

the F4E Director took over the Action Plan prepared
and used by the Acting Director to implement the necessary actions
in F4E. He closely collaborated with the ITER Organization Director
General to carry out further improvements to the
project;

he also modified the existing F4E structure and a new
Organization Breakdown Structure was effective as of 1 October
2016;

the close collaboration with the ITER Organization led
to the approval of the updated overall project schedule (in
November 2016 at the ITER Council-19). As for the overall ITER
project cost and the associated estimate of resources for the
overall period 2016-2035, it was approved ad referendum
(i.e. subject to domestic processes of obtaining approval including
approval of budgetary authorities and/or parliament if required). A
staged approach is now foreseen for the project with first plasma
in December 2025. These decisions were in line with the conclusions
from the independent review of the Updated ITER Long Term Schedule
and with the conclusions of the work carried out by F4E as
explained below.